Concentric Sky, Inc.

We hear from various sources that the FTC may be preparing a challenge to Google’s acquisition of AdMob. Like many in the industry, we believe this would be a serious mistake. There are much better places for the agency to focus its attention.

As an independent development shop with apps on several platforms, we’ve been tapped by the FTC to provide expert witness testimony on the matter. We’ve spent several weeks giving testimony, helping the FTC understand mobile technology and the mobile advertising space as a whole. It is apparent to us from these discussions that the FTC is not in a good position to understand - let alone regulate - the mobile ad market.

The mobile space is clearly in its infancy and is changing rapidly. At every touchpoint with the FTC, we felt like the market had shifted enough that what we’d said previously was already out of date. Recent game changing events like Apple’s iAd platform - not to mention Alcatel-Lucent’s new ad system that bypasses apps entirely - make it hard to understand why anyone would feel that a Google/AdMob partnership will reduce competition. From our perspective, this acquisition is a positive, reaffirming event for the entire mobile industry.

The deal offers a number of key benefits to the industry:

* It shows that the mobile ad space is an industry to be taken seriously. This trend will draw a host of new advertisers to the space leading to the creation of new kinds of content, powering the development of new mobile hardware, and inspiring the creation of new, innovative ad networks.

* It shows investors that start-ups like AdMob have a viable exit strategy. This will encourage other companies to enter the space to work with the influx of new advertisers.

* It will usher in a wave of innovation in advertising as ads move from simple banners to interactive experiences. Apple has this vision for the iPhone. Google/Admob is well positioned to execute on it for other platforms.

* If this wave of innovation follows past trends, the influx of new advertisers will provide currently unforeseen revenue opportunities for developers across the board.

Our testimony focused on these points, the nature of the industry as it currently exists, and what might happen to the industry under various scenarios. We tried to emphasize our view that mobile advertising is an industry in flux - and as such, we strongly believe regulation now would be premature.

Unfortunately, the industry’s rapid rate of change means that by the time the FTC has its collective head around the industry as it stands today, the industry will have evolved into something very different. This, of course, is a serious problem with many intersections of business and government. ( Finance, anyone? )

With new developments coming to light nearly every day, the future for the mobile ad industry is bright - but it is also uncertain. We urge our colleagues at the FTC to reconsider their position on this issue, approve the acquisition, and move on to more serious issues.

UPDATE: 05/21/2010 - FTC Closes its Investigation of Google AdMob Deal